Binance Hacked

Last Sunday, we made a prediction. “Holding other people’s money is about to become prohibitively expensive,” we wrote. “Many will be hacked, and their customers will lose money.”

Four days later, attackers emptied the hot wallets of the biggest exchange in the world.

On Thursday afternoon, about $6.3 billion left Binance in roughly 20 minutes. It is the largest theft in the history of crypto. It is four times the previous record, set when Bybit lost $1.5 billion last year, and by TRM Labs’ count it is more than double what thieves stole across the entire industry in all of 2025. Investigators at TRM Labs and Chainalysis blame TraderTraitor, the North Korean unit the FBI blamed for Bybit. Within hours, Binance suspended every deposit and every withdrawal on the platform.

We did not expect it to happen this quickly, or on this scale.

Nobody broke Bitcoin, and nobody needed to. Binance says the attack began with a single engineer’s laptop, which gave the attackers a way into the systems it uses to send withdrawals. Its investigators have since found more points of entry, and experts suspect the attackers used AI tools to scout targets and trick staff. Last week, we wrote that an attacker only has to find one unlocked door, while an exchange has to lock every one of them, every day, forever. On Thursday, Binance left one open.

This is what we meant by a honeypot. Binance held roughly $144 billion in assets before the attack. A prize that size justifies almost any effort to reach it, and the people making that effort are not hobbyists. If investigators are right, they work for a state that uses stolen crypto to help fund its nuclear program.

Binance set aside $6.34 billion of its own money to replace what was stolen, and it says the losses “will not be passed on to users.” That is what prohibitively expensive looks like. Binance is one of the few companies in the industry that could write that cheque, and if it keeps its word, its customers will be spared the worst of what we predicted. The next honeypot may not be able to pay.

Even customers who are made whole learned something this week. For more than two days, they could not move a single coin. The main wallet the attackers drained had been listed in Binance’s October proof-of-reserves report as backing customer balances. Binance now says customer balances in its major coins are fully backed again, though its full reserve report has not been published yet.

None of this means self-custody is free of risk, and we won’t pretend it is. This summer, a flaw in old Coldcard firmware let attackers drain bitcoin from thousands of addresses. This month, tampered Ledger devices sold through a reseller in Southeast Asia emptied about 100 wallets. Those were real losses for real people.

But look at the shape of each attack. Coldcard’s attackers had to sweep thousands of addresses to take roughly $100 million. Binance’s attackers needed one way in to take $6.3 billion.

Binance reopened withdrawals early this morning, starting with bitcoin. Since then, its customers have pulled out $2.5 billion more than they put in. Its co-CEO, Yi He, gave the most honest assessment of the week: “We should have invested more in security earlier.”

Enjoy another Sunday edition ☕

Buy Bitcoin ⚡️

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*Dollar figures in USD unless CA$ indicated.

📊  Market

• Bitcoin is trading around CA$109,000, down 3.4% on the week. It fell to about CA$107,000 after the Binance hack and has climbed back since. Beaver Bitcoin BTC-CAD
• The Fed held, but not unanimously. The Federal Reserve kept its benchmark rate at 3.75% to 4% in a 10 to 2 vote. Governor Lisa Cook and Cleveland Fed President Beth Hammack both wanted another quarter-point hike. Two dates from our Who Blinks edition are still ahead: the U.S. midterms on November 3 and the Treasury’s next borrowing plan on November 4. CNBC

🔓  Custody

• A public company found out it never owned its bitcoin. Datavault AI disclosed that it hasn’t been able to withdraw bitcoin from the exchange Biconomy since June. Its audit committee concluded the coins never qualified as the company’s own asset, and it will restate four sets of financial statements, cutting reported assets by up to $92.2 million. The stock fell nearly 50% on Tuesday. A balance on someone else’s platform is a promise, not bitcoin. CoinDesk, TFTC

🇨🇦  Canada

• The Bank of Canada raised rates for the first time since July 2023. The policy rate rose a quarter point to 2.50%, ending seven straight holds. Governor Tiff Macklem said further increases may be needed to keep high energy prices from spreading into broader inflation. CBC, Bloomberg
• Ottawa is buying a stake in Cohere. The federal government will invest up to CA$1.6 billion in the Toronto-based AI company through a Crown corporation, joining a CA$7 billion round led by Germany’s Schwarz Group that values Cohere at nearly CA$36 billion. Prime Minister Mark Carney framed it as an investment in sovereign AI, tied to commitments on Canadian jobs, computing infrastructure and keeping Cohere headquartered here. Critics, including Charles Lammam in The Hub, argue that a company backed by Nvidia and a Saudi Aramco venture fund doesn’t need public money, that a roughly 4.5% stake buys Ottawa little control, and that taxpayers carry the risk on borrowed money. BNN Bloomberg, BetaKit, The Hub
• Canadians sent $2.36 billion home in crypto. Chainalysis says small stablecoin and bitcoin transfers from Canada to India, China and the Philippines rose 141% in the year to June. Cointelegraph

🏛️  Institutions

• Strategy skipped a week. The largest corporate holder bought no bitcoin from October 19 to 25, ending a five-week buying streak, and spent $205 million buying back its own preferred stock instead. It still holds 848,517 BTC. The Block
• Switzerland approved its first spot bitcoin ETF for everyday investors. FINMA cleared BIT Asset Management’s Bitcoin Fund ETF, which is expected to start trading on the SIX Swiss Exchange in November. Cointelegraph

📡  Signal

• Christine Lagarde is leaving the ECB eight months early. The European Central Bank president announced she will step down on February 7, 2027, in an unusual video that showed her with bandages on her face, and it raised more questions than it answered. Lagarde says the bandages followed surgery to remove a small skin cancer, and that she is leaving early because she wants “the freedom of speech, the freedom of expression” to weigh in on issues beyond monetary policy. Lagarde on X, Reuters
• Bitcoin has absorbed a lot this year. Analyst Quinten Francois listed the Iran war, the failed CLARITY Act, the Fed’s first hike in three years, long-term Treasury yields at their highest since 2007, Strategy’s summer sale of 6,916 BTC, the Coldcard firmware exploit, tampered Ledger devices and now Binance. “I genuinely don’t think people realize how much bad news Bitcoin has absorbed.” Quinten on X

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Last week, we said the bill for holding other people’s money would land on customers, as higher fees or as an unwelcome notice. On Thursday, Binance’s customers got the notice. This time, Binance has promised to pay the bill itself. Custodians will keep paying it, in security teams, in audits and in reserves set aside for the next attack, and sooner or later their customers pay for all of it.

Beaver is non-custodial by design. When you buy bitcoin with Beaver by Interac e-Transfer, bill payment or wire, it goes straight to a wallet only you control. We never hold your bitcoin, so there is no pile of it to steal and no withdrawal for us to suspend.

Someone always pays the bill for custody. The surest way to make sure it isn’t you is to hold your own keys.

Aubrey

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